| Breaking new ground in terms of value in the Philippines, the initial public offering of Dr Lucio Tan’s eponymous LT Group raised a record 37.72 billion Philippine pesos (US$912.2 million) in the second week of April. The titanic equity sale was the country’s largest ever, and marked a major milestone for the economy and for the conglomerate. The company – which is one of the biggest on the island archipelago – cashed in on the upward swing of the bell-curve, as the economy’s stock market sky-rocketed after an investment grade rating was given to the Philippines in March.
The LT Group specialises in banking and property development, as well as tobacco, beverages and distilled spirits, and the company is expected to use the proceeds to repay debt as well as augment its beer liquor, property and banking operations. The IPO benefitted enormously from an outpouring of demand from global investors for Philippine assets and was seven times oversubscribed. The transaction also attracted numerous cornerstone investors, who participated in the transaction through the first formal cornerstone tranche for a Philippine equity placement. Allen & Overy represented the LT Group and Sidley Austin acted on behalf of UBS – the sole book-runner on the share offering. Picazo Buyco Tan Fider & Santos advised the bank on Philippine law. The public offering was hailed as the largest ever book of demand for a Philippine equity sale. In terms of the magnitude of the deal, this IPO able to trump both the US$904 million that San Miguel raised in 2011 as well as Cebu Pacific Air Inc’s US$620 million IPO in 2010, formerly the largest IPO’s in the Philippines. James Grandolfo, head of international capital markets practice at Allen & Overy commented that “this transaction is proof that well run Philippine businesses are clearly on the radar of the largest and most important investors around the world.” |
